: HOW BREAKING AWAY FUELS BREAKTHROUGHS

In the world’s most innovative companies, ‘Skunk Works’ has become the standard for running top secret projects with elite special teams.

by Matthew E. May

IF YOU HEAD NORTH FROM ON INTERSTATE 5, hang a Skunk Works is, and has been since its inception under Kelly dur- right on the Antelope Valley Freeway toward Palmdale and the ing World II, Lockheed’s top-secret Advanced Development Pro- Mojave Desert, and cut east past the Antelope Valley Coun- gram. try Club, you’ll run into the Sierra Highway, off which you can ran Lockheed’s innovative entity for nearly 45 see ’s Skunk Works building, not far from Air years, from its inception in 1943 to 1975, when he turned the reins Force Plant 42 and Edwards Air Force Base. You’ll know you’re in over to his longtime right-hand man, friend, and protégé, the late the right place because you’ll see a white building with a cartoon Ben ‘Stealth’ Rich, whose memoir Skunk Works remains the de- skunk on it — the Skunk Works logo. finitive thesis on the Lockheed program. As you drive around, you’ll see a good bit of barbed wire, a It was the appearance of Germany’s first jet fighter planes in high concrete wall, and plenty of ‘No Access’ signs. You’ll see an the skies over Europe that prompted the U.S. War Department F-104 Starfighter on display near the main entrance off Lockheed in 1943 to knock on the door of Lockheed Aircraft Corporation, Way and pass Kelly’s Way, named for Lockheed’s legendary chief headquartered in Burbank, , next to the Burbank air- engineer, Clarence ‘Kelly’ Johnson. port. Lockheed actually owned the airport and had gone to great No matter how hard you try, or how many times you call the lengths to conceal the entire area from Japanese air reconnais- Lockheed Martin public relations office, you will not get inside. sance. An enormous burlap tarp painted to depict a suburban

Rotman Magazine Spring 2013 / 53 ‘Skunk Works’ refers to any effort that involves an elite special team that breaks away from the larger organization to work autonomously on an advanced or secret project. neighborhood camouflaged the factory, adorned with artificial tory, figuring that the overwhelmingodor would help keep ‘nosy trees, buildings, and cars (made of rubber) to give it a three-di- parkers’ away. mensional effect. The whole setup reminded people of ’s L’il Abner For the War Department, there was just one man for the comic strip, and the ‘Skonk Works’, a dilapidated factory on the job: 33-year-old Kelly Johnson, Lockheed’s talented but eccentric remote outskirts of Capp’s fictional backwoods town. In the com- chief engineer. In the eyes of Lockheed CEO Robert Gross, John- ic, scores of locals were done in every year by the toxic son “walked on water,” and had done so since he told Lockheed fumes of concentrated ‘skonk oil’, which was brewed and barreled engineers ten years earlier that the design of their twin-engine daily by grinding dead skunks and worn shoes into a constantly commercial plane, called the Electra, was seriously flawed. At the smoldering still for a purpose that Capp never disclosed. time, Kelly was a 23-year old engineering student at the University One day, a designer picked up a ringing phone and answered of Michigan, where the Electra prototype was being tested in the it with, “Skonk Works.” The name stuck, and it wasn’t long before school’s wind tunnel. even those working at the main Lockheed plant were calling it Kelly contradicted his professors and informed Lockheed that, too. Over the next 15 years, Skonk Works became part of the engineers in no uncertain terms that if one of the Electra’s engines Lockheed lexicon. In 1960, when Al Capp’s publisher objected to went out, the plane would go down. Not only did Kelly correct the Lockheed’s use of the name, rather than abandon it, they changed design flaw, he did so with an unconventional twin-tail design that it to Skunk Works and registered both the name and the cartoon would become the Lockheed signature. The plane saved Lock- skunk logo as trademarks, thus becoming the official alias of the heed and revolutionized aviation in the 1930s. Johnson’s star rose, Lockheed Advanced Development Program. and he became the go-to guy on everything from aerodynamics to In the years since, the term ‘skunk works’ has come to refer flight testing, including flying the planes he built; he declared that to any effort that involves anelite special team that breaks away unless he scared himself nearly to death once a year in a cockpit, from the larger organization to work autonomously on an ad- he wouldn’t have the proper perspective to design good planes. vanced or secret project, usually tasked with breakthrough inno- Johnson took all of three days in the late 1930s to transform vation on a limited budget and under aggressive timelines. The the Electra into a bomber for the British . Called term has even become official, and is defined in the fourth edition the Hudson, it was so successful that England ordered 3,000 of of the American Heritage Dictionary of the English Language as “an them. Kelly’s colleagues were so awestruck by his design skills often secret experimental laboratory or facility for producing in- that they swore he could actually see air. novative products, as in the computer or aerospace field.” In 1939, Johnson designed and built the only American Perhaps it was the stink that drove Johnson’s secret team to fighter plane in production throughout U.S. involvement in World design and build the prototype for the P-80 Shooting Star—nick- War II: the P-38 Lightning Interceptor. If you’ve seen World War named Lulu Belle—in a mere 143 days, 37 days ahead of schedule. II footage, you’ve seen the P-38: it’s the twin-propeller plane with Although World War II ended before the jet fighter could prove the funny-looking twin-boom tail design. It was the most maneu- itself, Lockheed produced nearly 9,000 during the lead-up to the verable propeller plane of the war and played several roles. But Korean War. The P-80, later called the F-80, won the first all-jet the P-38 was no match for Germany’s new jet fighters. The War dogfight over the skies above North Korea. Department needed a new plane, and fast. Given the success of the P-80 project, Lockheed manage- Challenging constraints shaped the project: build a jet fight- ment agreed to let Johnson keep his elite design and development er prototype that would fly at 600 miles per hour — the edge of team running, as long as it did not interfere in any way with his the speed of sound and 200 miles per hour faster than the cur- primary duties as Lockheed’s chief engineer and was kept on a rent Lockheed P-38 propeller plane — in just 180 days. The only shoestring budget. Kelly hand-selected a few of the brightest de- problem was that Lockheed was out of floor space, as the entire signers and moved into a building known only as ‘Building 82’. complex was devoted to 24/7 production of their current planes. Skunk Works would remain there until it moved operations out to The jet fighter project was to beconducted with top secre- California’s Mojave desert in 1994. Johnson split his time between cy, and so the space constraint was something Kelly decided to the main Lockheed plant and Building 82, usually turning his at- leverage. He rented a large circus tent, borrowed 23 of the best tention to Skunk Works in the latter part of each day. design engineers and 30 shop mechanics from Lockheed’s main “Those guys brainstormed what-if? questions about the fu- operation, and set up camp next to a foul-smelling plastics fac- ture needs of commercial and military aircraft,” writes .

54 / Rotman Magazine Spring 2013 “And if one of their ideas resulted in a contract to build an experi- ing a single fundamental belief: don’t build an you don’t mental prototype, Kelly would borrow the best people he could believe in. His principles: first, it’s more important to listen than find in the main plant to get the job done. That way the overhead to talk; second, even a timely wrong decision is better than no de- was kept low and the financial risks to the company stayed small.” cision; and third, don’t halfheartedly wound problems—kill them There was nothing fancy about the Skunk Works space. In dead. fact, Johnson preferred to keep things as spare as possible. When Over time, Kelly developed 14 ‘rules’ for all Skunk Works Ben Rich was lent out temporarily to Johnson in 1954, little did he projects as a way to put his core belief and basic principles into know that he would never leave. He describes his first impression practice. Half of these rules (with a few word substitutions) can of the space as being nearly as eccentric as Kelly himself: be applied to virtually any Skunk Works project, and they pre- scribe a robust framework within which to operate in an innova- The office space allocated to the Skunk Works operation tive environment: was a narrow hallway off the main production floor crowded with drilling machines and presses, small parts assemblies, 1. The Skunk Works manager must be delegated practically and the large assembly area which served as the produc- complete control of his program in all aspects. He should tion line. There were two floors of surprisingly primitive and report to a division president or higher. overcrowded offices where about 50 designers and engineers 2. Strong but small project offices must be provided. were jammed together behind as many desks as a moderate- 3. The number of people having any connection with the size room could unreasonably hold. Space was at a premium, project must be restricted in an almost vicious manner. Use so much so that Kelly’s ten-person procurement department a small number of good people (10 to 25 per cent compared operated from a small balcony looking down on the produc- to the so-called normal systems). tion floor. The place was airless and gloomy and had the look 4. A very simple drawing and drawing-release system, with of a temporary campaign headquarters where all the chairs great flexibility for making changes, must be provided. and desks were rented and disappeared the day after the 5. There must be a minimum number of reports required, but vote. important work must be recorded thoroughly. But there was no sense of imminent eviction apparent 6. The contractor must be delegated the authority to test his inside Kelly’s Skunk Works. His small group was all young final product in flight. He can and must test it in the initial and high-spirited, and thought nothing of working out of a stages. If he doesn’t, he rapidly loses his competence to phone booth, if necessary, as long as they were designing and design other vehicles. building . Added to the eccentric flavour of the place 7. Access by outsiders to the project and its personnel must be was the fact that when the hangar doors were opened, birds strictly controlled by appropriate security measures. would fly up the stairwell and swoop around drawing boards and dive-bomb our heads, after knocking themselves silly The remaining seven rules are all specifically focused on mili- against the permanently sealed and blacked-out windows, tary defense contract work. You can see all 14 at lockheedmartin. which Kelly insisted upon for security. Our little feathered com/us/aeronautics/skunkworks/14rules.html. friends were a real nuisance, but Kelly couldn’t care less. All Ben Rich neatly tied together the elements that have allowed that mattered to him was our proximity to the production the Skunk Works program to enjoy an ongoing record of break- floor. A stone’s throw was too far away; he wanted us only through innovation for nearly 70 years: steps away from the shop workers, to make quick structural or parts changes or answer any of their questions. We created a practical and open work environment for engi- neers and shop workers, forcing the guys behind the draw- That first secret project set the standard for every Skunk Works ing boards onto the shop floor to see how their ideas were project to follow, including the U-2 bomber, the SR-71 Blackbird, being translated into actual parts and to make any necessary and the F-117 Nighthawk stealth fighter. High-quality designs in a changes on the spot. short time frame with limited resources became the hallmark of a We made every shop worker who designed or handled Skunk Works project. a part responsible for quality control. Any worker—not just a Johnson had three simple management principles support- supervisor or a manager—could send back a part that didn’t

Rotman Magazine Spring 2013 / 55 High-quality designs in a short time frame with limited resources are the hallmarks of a Skunk Works project.

meet his or her standards. That way, we reduced rework and In the years since Kelly Johnson retired, Skunk Works has become scrap waste. the de facto standard for running top secret projects with elite We encouraged our people to work imaginatively, to special teams among the world’s most innovative companies. improvise and try unconventional approaches to problem Not surprisingly, it was the model Steve Jobs used in launching solving, and then got out of their way. By applying the most the Macintosh division of Apple (see sidebar below.) common-sense methods to develop new technologies, we saved tremendous amounts of time and money while operat- In closing ing in an atmosphere of trust and cooperation both with our If you are contemplating your own Skunk Works project, take a government customers and between our white-collar and page from Kelly Johnson and Lockheed’s book: set a stretch goal, blue-collar employees. frame it with intelligent constraints, select a special team, secede In the end, Lockheed’s Skunk Works demonstrated the from the main operation — and get to work. awesome capabilities of inventiveness when free to operate under near ideal working conditions. That may be our most enduring legacy, as well as our source of lasting pride. A successful Skunk Works [project] will always demand a strong leader and a work environment dominated by highly Matthew E. May is the founder of Edit Innovation, a Los motivated employees. The Skunk Works’ strength is the au- Angeles-based creative consultancy, and the author of The Laws of Subtraction: 6 Simple Rules for Winning in the Age of Excess tonomy they have enjoyed from management and their close Everything, from which this story is adapted. He is a frequent teamwork and partnership with their customers. contributor to Rotman Magazine.

SKUNK WORKS @ APPLE

Macintosh began as a small Skunk Works project for a low-cost project, Jobs was allowed to take over the Raskin Macintosh computer that was being developed by Apple employee Jeff project, which suited Apple management fine: it kept Jobs oc- Raskin. It was Raskin who introduced Steve Jobs to Xerox Palo cupied in a distant building away from the main operation. It suited Alto Research Center (PARC) engineers, who had developed Jobs as well: “It was like going back to the garage for me,” he told the graphical user interface technology that would one day be- Isaacson. “I had my own ragtag team, and I was in control.” come the hallmark of Apple Computer’s operating system. Jobs cherry-picked a team of about 20 ‘pirates’, as he In his book Steve Jobs, biographer Walter Isaacson tells referred to them, and seceded from the Apple main campus. He how in 1979, Raskin wrote a manifesto titled “Computers by the relocated the team to a small building three blocks away, next to Millions”, whose opening lines read: “If personal computers are a Texaco station. The two-story brown-shingled building became to be truly personal, it will have to be as likely as not that a family, known as Texaco Towers. picked at random, will own one.” It was thus Raskin’s vision to As the success of Macintosh grew, so did the team, which create a “computer for the masses,” built to be essentially an became a division and moved back to the main Apple campus in inexpensive, self-contained appliance using a graphical interface. 1983. Jobs kept the renegade spirit alive with his maxim, “It’s better Raskin got permission to begin a small development project, which to be a pirate than to join the Navy.” Jobs actively recruited rebels he named after his favourite kind of apple, the McIntosh, changing and ‘swashbucklers’—talented but audacious individuals who the spelling to avoid confusion with the name of the high-fidelity could move fast and get things done—to his A Team. sound system company McIntosh Laboratory. On his 28th birthday, programmer Steve Capps hoisted a Raskin and Jobs didn’t see eye to eye, and Raskin eventually Jolly Roger with the Apple logo for an eye patch, and the team left Apple. By that time, Jobs had been stripped of his research erected a billboard outside Apple headquarters that read: “Happy and development role and made the non-executive chairman 28th, Steve. The Journey Is the Reward—The Pirates.” of the Board, without operational control. Since it was a minor

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